Industry demands removal of harsh tax measures
KARACHI:
The Karachi Chamber of Commerce and Industry (KCCI) has asked the government to remove the harsh tax measures imposed in the budget.
Citing an example, the KCCI asked the authorities how will a company with a turnover of Rs15 million per day deposit Rs150,000 as turnover tax (one per cent) when its own profitability is not more than one or two per cent.
President of Karachi Chamber of Commerce and Industry (KCCI) Abdul Majid Haji Muhammad and Chairman of Taxation Sub-Committee of the KCCI, Qamar Usman said this in a joint press statement on Wednesday.
KCCI has also started taking on board presidents of the chambers of commerce of other cities to formulate a joint strategy nationwide, they said.
They also said that individuals with a turnover of Rs50 million and above are normally traders who sell the stocks to each other and the same stocks change hands many times. How is it possible that every time a 3.5 per cent withholding tax could be deducted when profitability margins are already low in such cases, they said.
Talking on the 0.3 per cent tax imposed on banking transactions, they said it is very unfortunate that this has been extended to online transfers and banking instruments like pay orders and demand drafts among others.
They said that there are online accounts of companies established all over the country where clients deposit cash to be transferred to the principal company. It is senseless that 0.3 per cent tax is deducted on such transactions which simply deter the companies to operate transparently through banking channels.
Similarly, they said the rate of tax for association of persons (AOPs) slabs previously applicable have been removed and instead a flat rate of 25 per cent have been applied in the budget, which means the tax has been increased by more than 100 per cent for the AOPs in the lower slabs.
Similarly, a six per cent withholding tax has been applied on services sector which is also very high and not acceptable, they said.
Published in The Express Tribune, July 8th, 2010.
The Karachi Chamber of Commerce and Industry (KCCI) has asked the government to remove the harsh tax measures imposed in the budget.
Citing an example, the KCCI asked the authorities how will a company with a turnover of Rs15 million per day deposit Rs150,000 as turnover tax (one per cent) when its own profitability is not more than one or two per cent.
President of Karachi Chamber of Commerce and Industry (KCCI) Abdul Majid Haji Muhammad and Chairman of Taxation Sub-Committee of the KCCI, Qamar Usman said this in a joint press statement on Wednesday.
KCCI has also started taking on board presidents of the chambers of commerce of other cities to formulate a joint strategy nationwide, they said.
They also said that individuals with a turnover of Rs50 million and above are normally traders who sell the stocks to each other and the same stocks change hands many times. How is it possible that every time a 3.5 per cent withholding tax could be deducted when profitability margins are already low in such cases, they said.
Talking on the 0.3 per cent tax imposed on banking transactions, they said it is very unfortunate that this has been extended to online transfers and banking instruments like pay orders and demand drafts among others.
They said that there are online accounts of companies established all over the country where clients deposit cash to be transferred to the principal company. It is senseless that 0.3 per cent tax is deducted on such transactions which simply deter the companies to operate transparently through banking channels.
Similarly, they said the rate of tax for association of persons (AOPs) slabs previously applicable have been removed and instead a flat rate of 25 per cent have been applied in the budget, which means the tax has been increased by more than 100 per cent for the AOPs in the lower slabs.
Similarly, a six per cent withholding tax has been applied on services sector which is also very high and not acceptable, they said.
Published in The Express Tribune, July 8th, 2010.